Goldman Sachs indicates that Kamala Harris’ economic policies would likely remain similar to those of President Biden if she becomes the Democratic presidential nominee. This assessment follows Biden’s announcement that he is exiting the race amid increasing pressure for him to step aside after a poor debate against former President Donald Trump.
In a statement endorsing Harris, Biden confirmed her intent to continue her campaign. She has garnered significant endorsements from prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs analysts, led by chief economist Jan Hatzius, believe that a shift in policy is unlikely.
They project that the chance of a Democratic victory in the upcoming presidential election would increase minimally with Harris as the nominee, estimating it at just under 40%. The firm had previously indicated that tax policy will emerge as a primary concern next year, especially with the expiration of certain personal income tax provisions from the Tax Cuts and Jobs Act set for the end of 2025. The forthcoming election will determine the future of these tax cuts and whether any new taxes will be imposed.
Goldman Sachs provided forecasts for fiscal policy should Biden be reelected, highlighting key tax figures: a proposed tax rate of 39.6% on incomes over $400,000, an increase in the corporate tax rate to 28% from its current 21%, and a rise in the Social Security and Medicare tax rate for high earners to 5% from 3.8%.
In the event that Harris secures the nomination, she may select from several potential candidates for the vice presidential spot, including Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Senator Mark Kelly of Arizona.